Rio, BHP reject WA govt iron fee proposal

Rio Tinto and BHP Billiton say they have no intention of taking up the West Australian government's offer to change one of the fees they pay for mining iron ore in the state.

The companies have been paying a 25 cent per tonne lease rental since the 1960s, which Nationals WA leader Brendon Grylls wants to hike up to $5 per tonne to raise $7.2 billion over four years and improve the state's ailing finances.

The Liberal state government has repeatedly said it does not support the proposal.

Premier Colin Barnett told reporters on Tuesday he remained against it, but the state government was in talks with the companies about making the charge payable as an up-front sum.

Discussions were being led by Treasurer Mike Nahan, he said.

"We are looking at that 25 cent fee because it is an anomaly," Mr Barnett said.

"We're honouring the agreements and any changes to those agreements can only come by way of mutual acceptance."

A Rio Tinto spokesman confirmed the company had been approached by the WA government to "pay out" its lease rental but did not plan to take up the offer.

"Rio Tinto is already making a significant contribution to the WA government," the spokesman said.

"Since 2006, the company has paid $13 billion in royalties to the WA government - the equivalent of 10 new children's hospitals."

BHP Billiton also rejected the idea.

"We can confirm the premier's statement that the WA government has discussed this idea with us," a spokesman said.

"We can also confirm that BHP Billiton has not agreed to it and has no plans to do so."

Mr Barnett had earlier said the companies paid hundreds of millions of dollars to the WA community in exchange for extracting iron ore, which was used for funding services including schools and hospitals, so it was in the community's interest that the mining industry stayed strong.